From Moscow to Beijing: A journey from past to future

BEIJING — For passengers flying between Moscow and Beijing, the takeoff and landing are worlds apart.

On one end is the Russian capital's shabby, dimly lighted Sheremetyevo airport, where the cigarette smoke can be thick and the seating scanty. At the other is Beijing's new $3.8 billion Terminal 3, a place of soaring glass walls, trickling fountains and an undulating roof meant to resemble a dragon in flight.

When crude oil prices were high — hitting a record $147 a barrel last summer — Russia was awash with petro-dollars and boasts of remaking the world order. With the price of crude now down by half, the economy is battered, and the Russian government acknowledges that it's at a "dead end."

Chinese exports slowed from the period of red-hot expansion, but the country has proved to be a massive economic engine, perhaps able to lead the world out of recession.

Russia, despite its bold stance abroad, has to battle the appearance of being a Third World producer of raw materials on the home front. Asked about the Russian economy, Beijing analyst He Jun gave a little grin, slapped his hands together as though in prayer and said: "Oil and gas." In other words, at the core of the Russian economy is a prayer that the price of oil and gas will go up.

"I think Russia has become a second-class economy in the world," said He, the vice general manager for Anbound Group, a leading financial consultancy in Beijing.

Recent statistics appear to back him up. Despite being sideswiped by the financial crisis, China's gross domestic product — the sum of all goods and services — grew by 7.9 percent in the second quarter of 2009 over the same period last year. Russia's GDP fell last quarter by a crushing 10.9 percent.

"We cannot develop like this any longer. It's a dead end," Medvedev told political leaders at the Black Sea resort of Sochi on Aug. 10, according to Russian news wires. "And the crisis has placed us in a situation where we will have to make a decision on changing the structure of the economy. Otherwise, our economy has no future."

Considering their similarities — the legacy of communist economies and continued rule by authoritarian governments — the biggest difference appears to be the men in charge. Chinese officials for years have been carefully guiding reforms such as designating coastal areas as export centers and, in fits and starts, transitioning from state to private-owned enterprises.

"The possibility of Russia following the Chinese example in the economy was discussed by Soviet and then Russian leadership ... but the country went a different way," said Mikhail Delyagin, a frequent Kremlin critic who was an economic adviser to President Boris Yeltsin during the 1990s. "The economy started to change — and has been changing ever since — to meet the interests of a limited group of bureaucrats, who found out that to rob the country is more profitable than to develop it."

The Kremlin let Russia's infrastructure decay, failed to diversify beyond oil and gas and allowed an environment of lawlessness to take hold. Businesses in Russia often not only must pay bribes but also worry about "raiding," the thuggish practice of law enforcement or tax authorities shutting down firms that later are taken over by men with close connections to the Kremlin or its proxies.

The problem comes from the top, said Valery Solovey, an analyst with the Gorbachev Foundation, a liberal research center in Moscow.

"They did not — and do not — love their country and its people, and they have been focused on robbing them," Solovey said. "All post-Soviet governments viewed the country as a colony. ... In Russia, no one thinks about the future. Everyone wants to make quick money and would, without much hesitation, kill a hen which lays golden eggs."

Of course, some analysts in Beijing and Moscow question the sustainability of China's upward climb. Can its growth continue when a $585 billion stimulus package ends next year? Will the country be able to shift from exports to domestic consumption?